Tri Level, 3/2/2car attached
ARV 270K
Owes 202K no second
Monthly $1500
Lender is National City.
9 pmts behind plus already defaulted on previous forbearance plan he arranged when he was off work with an injury. Has new job and can handle payments but can’t catch up on the arrearage (now owes $25k in back payments and fees).
Sale scheduled 1/31, listed with Realtor (listing expires 1/31).
Treasurer shows taxes are completely current.
Fair amount of equity in this (60K+).
Owner really just wants to get out of the home before the sale date, but Realtor told him to list the property for $250K saying that someone would jump all over the $20K equity.
This is in Will County so I would like to do a short-sale then wholesale it because I don’t want to own something the next county over from me.
Problem with the short sale is, the house is a beauty (minor paint job needed, also could stand a new garage door) and the recent comps average $250K. What do you suggest is the best way to approach the lender to get them to ok a short sale? Or do you think the amount owed is short enough in relation to the value? Am I just being too greedy wanting to shortsale when there’s already so much to gain between the $202k owed and the $270 ARV? I just like the idea of having that much room.
I don’t see where the lender would consider a short sale. The house is worth $250k per your post which exceeds the loan of $202k and the back payments of $25k combined. They can just wait for it to sell prior to foreclosure and get paid off or follow-thru on their foreclosure and then sell it and recoup the full amount due. If the house is truly worth $250-$270 why don’t you make a purchase offer at just above the amount due on the loan. If accepted buy the house, make your repairs and then sell it.
Yeah, if it was trashed or something I probably could have, but then I probably wouldn’t want to! I think I will just try to offer close to payoff like you said. It will still leave lots of wiggle room. I’ll see if it flies.
Here’s my undereducated take.
Owes 202k + 25k (arrears) = 227k.
Recent comps = 250k - and make sure those are good numbers. Are you in Will county IL?
If my numbers are correct then that leaves you with 23k equity, not including closing and holding costs. Those numbers sound very tight for a seasoned r.e. investor.
If you have already included the arrears into the amount owed then I might pick it up and quickly wholesale it. Do you already have some potential buyers in place?
I would say try to short it. Get the lender to do an appraisal and sell your price the best you can to the appraiser. Do not expect to much just think of anything you get under the arrears as gravy especially if 202k is the total owed with arrears.
Sounds like National City really went out of their way to avoid foreclosing on the guy.
With that being said, I believe that a short sale would be in order considering the
Bolingbrook/Joliet/Plainfield market right now. Even though ARV is 270k you stated that
most comps are in the 250k range. You would be hard pressed to sell for top dollar
with soo many lower priced comparables on the market. I know this area very well.
Will is the largest county in Illinois and gives you a lot of room to play with in terms of the
amount of NOD’s filed right now. If you can show the lender that there are Thousands of
perfectly good homes on the market that aren’t selling, and even more in default status,
that their best bet would be to sell home to you in the next couple of weeks to get it off
their books.
The lender is not the problem, the Realtor is! The bank will readily consider accepting a sub
200k offer. But will the Realtor balk at letting seller go thru w/ it?
Thanks guys for the thoughtful and insightful posts (and pms).
Wealth Rx, I didn’t even think about it that way. The fact that the comps are lower than the values (based on the seller’s claim and a couple of searches on ditech and Bank One’s value page so give or take). The Realtor is the one that listed it at that price–I know that the Seller has to OK that, but I’m sure I know where the influence is coming from. The listing expires the same day as the court sale ???
I am in Cook County, not Will, so I’m not too too familiar with the area although I already have a couple of potential buyers lined up if I can make this happen. Great idea about showing homes in the area that are not selling. Homework time!